Clerical 'in bid talk' with GE
Thursday 23 November 1995
Clerical Medical, the UK mutual life insurer, is believed to be in discussions with a potential bidder, possibly GE Capital of the United States. Analysts put a price of about pounds 1bn on Clerical Medical, the eleventh largest life company in Britain in terms of worldwide premiums.
Clerical is one of many mutuals busily reviewing their future in the light of much tougher business conditions in the life market, and the resources needed to keep up with technological change. Last month, Norwich Union, one of the country's biggest mutual insurers, decided to convert to a public limited company, adding urgency to the argument among insurers and building societies about the importance of size and diversification.
Speculation about the suitor also centered on NatWest Group. Clerical Medical took a 7.5 per cent stake in NatWest Life when it was set up, and runs its administrative as well as some of its fund management operations. NatWest has met with only modest success in building up its life business, and the market believes it is interested in acquiring the expertise, systems and client list a mutual would provide.
Eric Hodson, finance director at Clerical Medical, said yesterday: "We are not in serious discussions at the present time with a third party."
GE Capital, the powerful financial services arm of General Electric, the American conglomerate, has publicly stated its intention of building up business in the UK. It has been linked to bid speculation surrounding Mercury Asset Management, Baring Asset Management and Gartmore.
Last week GE Capital announced that it is buying for pounds 270m one of the US life insurance businesses put up for sale by Aon, a Chicago financial services group. Clerical would bring products, market experience and a fund on which GE Capital could build.
Clerical Medical traditionally sold life insurance through independent financial advisors, but recently built its own salaried sales force, with mixed results. A planned merger with NPI, another life company, collapsed three years ago.
Its free asset ratio, used by analysts as a rough guide to the strength of a life fund, is low compared to its larger rivals. The percentage of free assets to total assets at Clerical is estimated to be 4.7, compared with 13.7 at Standard Life, 12.3 at the Prudential and 7.6 at Norwich Union.
- 1 Morgan Freeman on the riot-focused coverage of the Baltimore protests: 'F**k the media'
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 Length of pregnancy can vary by up to five weeks, scientists discover
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Saudi Arabia's King Salman sacks senior aide for 'slapping' a journalist behind him live on TV
Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
Italian police 'reveal' what Jesus looked like as a young boy
Florida couple forced to register as sex offenders for having sex on public beach
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...